This Week In Data #6
Interest rates, Declining exports, Automobile sales, NREGA demand and more...
This past week was fairly data heavy with first readings of economic activity in July. With last year's second wave of pandemic base wearing off, most data is, as expected, moderating on a YoY basis but with some exceptions. The most important event though was not a data release but the RBI hiking interest rates by 50bps with both the rate action and the guidance on the hawkish side. Goes without saying that further rate hikes are likely! Now, onto the data:
India's Services Exports rose 25% YoY in June as per provisional data. Imports continue to grow faster than exports. In June, they rose 45% YoY.
Total GST collections grew almost 30% YoY in July. This is slower than the growth in the preceding two months as the base has become less favourable.
Exports declined slightly in July, after having grown over 20% in the last few months. Commerce Department has attributed this to the restrictions on exports/levy of taxes for Iron ore, Iron & Steel etc
Overall Power Generation in the country grew just 2.2% YoY in July. This is the slowest growth since January 2022.
Total EWay bills generated in the country grew 20% YoY in July. While the growth is lower than during the June quarter, it is higher than during the March quarter.
Cargo Traffic handled by the major ports in the country grew 15% YoY in July. This is the second consecutive month of double-digit growth.
Rural Wage (for men) growth ticked up slightly to 4.8% YoY in June from 4.5% YoY in the previous month. Rural wage growth has remained below 5% for eight consecutive months
Domestic Automobile sales were weak in July. Both 2W and Passenger vehicle sales declined on a YoY basis after 3 months of growth. 2W sales declined by 11% YoY & passenger vehicle sales declined by 4%.
Capacity utilisation in the manufacturing sector rose to 75.3% in the March quarter. This is almost 6ppt higher than in the March quarter last year and is the highest since the pandemic.
FX Reserves rose US$2.3bn during the week ended 29th July. This comes after FX reserves had declined for the preceding 4 consecutive weeks.
Demand for work under NREGA declined almost 40% YoY in July, the second consecutive month of decline.
As of 5th October, the monsoon rainfall over the country is 6% above normal. The distribution though is not uniform. The East and North East regions have seen a 15% deficit in rainfall while the Southern states have received 35% above normal rains.
Our recent Insights
Our monthly Payments tracker was published last week. While optically the growth in payments was strong, underlying momentum is moderating. And merchant UPI payments have grown to now being 2x of Credit card payments and almost 3x of Debit card payments.
Services trade is normally expected to offset the large trade deficit on the goods account. But last couple of months, services imports have grown significantly faster than imports.
India has stepped up sourcing of crude oil from Russia since the Russia - Ukraine conflict has started. How much is this saving India's import bill - we crunch some numbers.
Next week will not be very data heavy. But the all-important inflation print for July will be released on Friday, along with the Industrial production data.